To begin with, I am going to make the following assumptions:
- People will pay for music but have a limited budget for it
- People want to be able to own their music, and do what they want with it (e.g.. no DRM, no network connectivity required, etc)
- Get artists as much of a cut of the proceeds as possible (i.e. fuck labels for the most part)
- Allow people to choose how their money gets distributed
- Keep it affordable yet sustainable (tough to find numbers for this one)
The general framework for accomplishing these goals is to offer a music subscription service similar to Microsoft's Zune Pass or Napster, but without all the bullshit and DRM. It would have the following general features.
- For a monthly fee you can stream/download as much music as you want
- Your account is accessible from anywhere with a connection (any computer)
- No 'net connection is necessary to actually listen to your downloaded music
- Music is DRM free and sharable/transferable/etc to any device
- Music you have downloaded is still available on your devices after your subscription ends
Distribution of $$$
The big thing I would like to see is to let people dictate how their money gets distributed. This is important for two reasons. First, it lets people actually understand that they are supporting artists allowing them to make more music. Second, it shows people that their money is not going to some middle man, it is actually going to pay for the value the are getting out of the system.
There could be different options available for where your monthly fee actually goes. A few that come to mind off the top of my head are listed below.
- Audioscrobbler style -- This is really where my idea originally stemmed from. In this model, your money would be distributed based on what artists you listen to in a given month. So lets say 35% of the songs you listen to in that month are by Murder by Death. 35% of your individual contribution would then go to Murder by Death for that month. Sites like Last.fm already have the infrastructure in place to track what you play and log it to your personal profile. It would not be a stretch to extend this and monetize it.
- Socialist style -- In this model your money would get distributed based on the artists who needed it most. There are a number of ways you could determine need, but an easy way to do it would be based on popularity. A user could apportion their subscription fee to the 10 least popular artists they listened to the past month or something. The idea here is that the user is then helping support artists he/she likes so that they are able to keep making music and delivering value to the user.
- Choose your own adventure -- Why not let users just choose which artists the money goes to specifically? Let Sarah give 50% of her subscription fee (minus the service cut) to Rob Costlow if she wants. If Sarah really likes Rob's music that much then she can decide to spend her money that way.
As far as the distribution of the money is concerned, Goal 1 is to let artists keep as much of it as possible. Obviously the service itself would need to take a cut, but this can be mitigated in a few different ways.
- BitTorrent -- BitTorrent could be used to legally distribute and share the music where possible to help cut down on server and bandwidth costs for the service. However it could not be used exclusively, since many artists would not be popular enough to have seeders willing to share. Basically when a user requests to download a song, the service should check the BitTorrent ratio first, then fall back to an actual server if the ratio is insufficient. Alternatively you could have a set of servers dedicated to being BitTorrent seeds and used as a backup for when the number of seeders is too low.
- Advertising -- The service itself could make money through advertising on the website you use to browse/download songs. This could be further enhanced by providing profile and social tools for people to use based around the music (see Last.fm again) to get people to go to the site for reasons other than just search & download.
- Peripheral products -- Artists could also be given the opportunity to sell other items through the site, such as concert tickets, limited edition vinyl, shirts, etc directly to fans. This would also help supplement artist income and could possibly drive revenue for the service.
- Bulk passes -- Offer people the opportunity to pay for a half or full year at a slightly discounted price. This money could then be invested and paid out to artists monthly based on the chosen scheme, with the interest from the investment going to the service provider.
How much would it cost?
I don't have the answer to this one offhand, I think it would take a decent amount of research to find a price-point that would most likely be profitable to both the service and artists. One option might be to experiment with a "pay what you want" scheme, although that might be too risky without setting a minimum price as well (say $10?). However by setting a minimum price I have the feeling that it would entice people to pay just the minimum.
Summary
The general theory behind all of this is that music has value and people will pay for it. Artists should be receiving most, if not all of this compensation since they are the ones providing the value. Paying for individual songs/albums is no longer a feasible model in today's world, but people should still have a way to make sure their favorite artists are getting paid and supported. I believe this model has the potential to do that, even in a world where people can download music for free (albeit illegally).
Just a final note, I think user feedback would be very important in this system. Showing people a results sheet of exactly how much of their money is going to which artists could increase buy-in and participation.
In the next post I will explore the feasibility of implementing this, who stands in the best position to do it, and possibly speculate some more on the current state of the industry.
7 comments:
Liked the article, except I see a few problems.
1) Not enough money. A "pay what you want" or "free" model wouldn't support the infrastructure and artists involved. It works for NIN cause they're popular and their audience gets "it." Try explaining how this works to listeners of Black Eyed Peas, they'd never pay a dime.
2) While not DRM, I suggest, at least, embedding your name and address into the metadata and having subscribers agree not to give away their music (or face legal prosecution). Of course, there'd be leniency - music is about sharing. Otherwise, there'd be nothing stopping me from getting a subscription and buying music for every single person I know.
3) If not that, then some sort of limit. $10/3 albums a month or something. That way things don't get out of control. With that methodology, it'd be easy to figure out exactly how much it'll cost to distribute per album, then set an appropriate cost.
4) The distribution of money is an interesting concept. Of course, with a system like this, a record label wouldn't need to exist. Several bands are quite successful without them. It's not even about being $$megarich$$ either,... it's just about living comfortably. I'm not sure how I would approach this one. Perhaps..., with your $10/3 album, $2 would go to each of the artists you purchased the albums from?
Obviously something has to change. The dinosaurs in the record companies (and TV/Video industry for that matter) have go to go, or got to learn.
I still buy from Apple, because I love ACC, it's DRM free and I can buy anywhere. Moreover, I'd like to support Apple's endeavors here. The record industry cannot stand the iTMS because it's such a dominate force. I mean, they gave DRM-free to almost every other music store, nothing. Then they lowered the prices on those stores and raised the prices on the iTMS and it's STILL trouncing the competition.
Ugh. I'm over it.
Thanks for the thoughts, I'll address your comments in order:
1) Perhaps. I don't have all the statistics on how those models have worked both in the music industry and across other industries. While I think it would be fun to try, I understand the risk and am not against a flat monthly subscription fee.
2) Anything you might try to do here would be subverted by people anyway and would just encourage people to seek other means of obtaining completely free and open music files. There is nothing stopping you from getting a subscription for everybody you know. The simple idea here is to educate people that if they do something like that, the artists they love might not be able to keep making music. Trying to stop people from sharing so far has only served to encourage it.
3) While this is a cheaper model and closer to traditional pricing strategies, I think it misses the point and would not get buy-in from users. In my opinion, people want that huge selection at their fingertips, even if they don't necessarily use it.
4)I have no problem with record labels ceasing to exist, and it sounds like you don't either :)
My entire model is definitely based around the premise that people will pay for music as long as you promise not to fuck with them (DRM, restrictions, etc) because they understand that unless artists get paid, the music won't get made. Because of this people will be more willing to pay for a service where most of the money goes to the artists. The assumption behind this premise might be wrong, and you can argue that, but I strongly believe it to be near the truth.
I'd also like to quickly point out that not all of Apple's tracks are DRM free (maybe ~20% still aren't). You're right that they are a dominant force, but their numbers as far as I can tell still pale in comparison to the actual use and exchange of music that goes on illegally. Plus I'm more inclined to be sympathetic to services that don't give in to major label demands quite as easily.
How does the Recording Engineer get paid? From the band up front? As part of "the artist"? I'd assume the labels might do some of this but not sure. Nate & AJ is homebrew all the way.
Yeah I had a discussion with a friend of mine earlier today about that. I am not all that familiar with what services labels currently provide to artists, but I get the impression that the value provided by a label has waned to a certain extent in the last decade or so.
Regardless, I take "artist" in my post to mean "everybody involved in the creation of the work." This could include marketing/promotion too I suppose. So it doesn't matter to me if the studio/label/engineer/whatever gets paid up front or through some sort of percentage contract, that's up to the artist to work out on an individual and as-needed basis. My goal is to simply ensure that the actual distributer of the music takes as little as possible off the top.
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